Are These The Top Consumer Discretionary Stocks For Your July 2022 Portfolio?
While investors search for possibly defensive stocks or the most active stocks now, consumer discretionary stocks are making headlines. For one thing, this part of the stock market would, admittedly, not be the first choice for investors now. When you consider the current condition across equity markets, this would be the case. After all, between a looming risk of recession, rising consumer prices, and shrinking U.S. GDP investors are understandably spooked.
Nevertheless, amidst all this turbulence, consumer discretionary firms remain as adaptive as ever. For instance, we could take a look at Walmart (NYSE: WMT). As of earlier today, the company is planning to introduce additional logistics fees for suppliers. Starting in August, Walmart will begin implementing a collect pickup charge from a percentage of the cost of goods and the cost of fuel in transporting those goods. As one of the largest retailers in the U.S., this would be a strategic move for the company as fuel and labor costs rise. This would be in line with comments from CEO Doug McMillon during Walmart’s latest quarterly earnings release back in May. According to McMillon, the company will focus on adjusting its operations to balance profit growth and consumer prices.
Meanwhile, e-commerce firm Shopify (NYSE: SHOP) also recently made a major update to its platform. This comes in the form of over 100 new tools, supporting merchant sales towards other businesses. Notably, this ranges from business tie-ins with Twitter (NYSE: TWTR) to crypto wallet integrations. All of which, Shopify hopes will further bolster the overall business of its merchants. On the whole, consumer discretionary firms do not appear to be sitting idly by now. Could one of these major consumer discretionary stocks in the stock market today be your next big long-term investment?
Consumer Discretionary Stocks To Buy [Or Sell] Now
To begin with, we will be taking a look at Amazon. This goliath in the e-commerce space could be a go-to for investors amidst the recent downturn in stocks. Unlike most firms in the consumer discretionary space, the company also boasts an industry-leading cloud computing division in its portfolio. Accordingly, investors looking to diversify their own portfolios could consider AMZN stock which has exposure to several industries. Even so, Amazon’s consumer-focused offerings should not be overlooked just yet.
All in all this would be the case following the company’s latest expansion of its Amazon Prime subscription offerings. In detail, Amazon is now teaming up with Grubhub to offer its Prime members a Grubhub+ membership. Through the one-year subscription, Prime subscribers can enjoy free food-delivery when making Grubhub orders. As it stands, this offer is available at over 4,000 cities across the nation.
Also, along with this deal, Amazon has the option to take on an additional 2% stake in Grubhub. In the case that it takes up this offer, Amazon would then have a stake of 15%. Because of all this, food delivery firms such as Uber (NYSE: UBER) and DoorDash (NYSE: DASH) would be under pressure. More importantly, would you consider investing in AMZN stock now with all this in mind?
Altria Group Inc.
Following that, we have Altria Group, one of the largest producers and marketers of tobacco, cigarettes, and related products. Notably, its subsidiary Philip Morris USA Inc. is one of the most profitable U.S. cigarette manufacturers, while John Middleton Co. is a leading cigar manufacturer. Despite having a leading portfolio of tobacco products in the U.S. market, it is transitioning to a smoke-free future through its Moving Beyond Smoking strategy by 2030.
Today, Altria received news that the U.S. Food and Drug Administration (FDA) has temporarily suspended its ban on Juul’s e-cigarette products. Altria has a 35% stake in Juul and the news will allow the company to keep its products on the market while it appeals the FDA’s ban. The ban was first issued last month on June 23 to ban Juul sales. One day later, a federal appeals court temporarily blocked the government ban. The ban was part of an effort by the FDA to bring scientific scrutiny to the vaping industry after years of regulatory delays. Juul says that it has already submitted enough information and data to address all issues related.
In May, the company held its annual meeting of shareholders. In it, Altria reaffirmed its 202 full-year earnings guidance. Diving in, the company expects full-year adjusted diluted earnings per share in the range of $4.79 to $4.93. On top of that, it also declared a regular quarterly dividend of $0.90 per share and will be payable on July 11, 2022, to shareholders of record as of June 15, 2022. As such, will you be adding MO stock to your portfolio anytime soon?
Spirit Airlines is an ultra-low-cost carrier with headquarters in Florida. It operates scheduled flights across the U.S., Caribbean, and Latin America. Recently, it received some positive news from the U.S. government. Notably, the U.S. Transportation Department (USDOT) is assigning 16 peak-hour runway timings to Spirit. These slots are at the increasingly busy Newark Airport in New Jersey.
The shift would be from Southwest Airlines (NYSE: LUV) to Spirit. According to the USDOT, this change “secures low-cost service options for Newark customers and improves competition in the Newark market.” As officials look to ease congestion at some of the nation’s busiest airports, it seems like travel demand is back in full force. For some context, Southwest has been servicing these 16 timings for about 12 years now. This would follow the merger between United Airlines (NASDAQ: UAL) and Continental back in 2010. United remains a prominent airline operator at Newark now and is currently operating 69% of flights according to data from the USDOT. In fact, United is temporarily reducing 12% of its daily departures this month for the sake of congestion management as well. In response to this positive update, Spirit appears to be optimistic.
The company notes that it plans to “continue to promote competition and offer affordable, high-value travel options for guests traveling in and out of the New York Metropolitan area.” On July 8, 2022, the company will be hosting a special meeting to provide proxy information and also details about the company’s merger with Frontier Group (NASDAQ: ULCC). With that being said, is SAVE stock worth investing in right now?